Law on Consumer Protection: business asks the VRU to remove corruption risks before voting for the document

11/ 01/ 2023

The European Business Association strongly opposes the inclusion of new provisions in Draft Law No.6134 On Consumer Protection that contradict the provisions of European directives, increase regulatory pressure on business, and contain corruption risks and others. At the end of last year, the EBA addressed official letters to the Chairman of the Verkhovna Rada of Ukraine, the Chairmen of the relevant parliamentary committees, MPs, and central executive authorities with a call not to support the draft law in the wording proposed at the meeting of the Verkhovna Rada Committee on Economic Development on December 9, 2022. Thus, the draft law included proposals that had not been previously discussed (although the document had been developed for almost 4 years in working groups), it also carries serious risks for Ukrainian entrepreneurs, levelling the state course of deregulation of entrepreneurial activity and not in line with European standards. The new rules propose to extend the draft law to the relations between legal entities, which contradicts Directive 2011/83/EU On Consumer Rights and destroys the very purpose of this Law, namely to regulate relations between consumers and business. The draft law is proposed to be extended to areas that do not belong to the sphere of consumption, for example, the provision of administrative services and notarial transactions, which also does not comply with Directive 2011/83/EU. Among other provisions that are categorically not supported by the business is the creation of two new, rather monopolistic in their functions, authorized bodies - the Union of Consumers Associations and the Commission for Out-of-Court Dispute Resolution. It is assumed that they will have extended atypical powers to control the activities of businesses and bring them to justice, for example, to conduct additional business inspections; impose fines; determine the amount of compensation; conduct mandatory paid training for entrepreneurs; etc. Such expanded powers, according to the EBA experts, may result in interference in the internal economic activities of business, a biased approach to determining the amount of damage and the cost of training programs. Business has already stressed that this document is of great concern to the community. All these novelties are opposed by the Ministry of Economy of Ukraine, which was directly involved in the development of this draft law in order to fulfill Ukraines obligations under the Association Agreement. At the same time, according to the EBA member companies, there is a high risk that draft law №6134 On Consumer Protection will be put to a vote in the near future and will be adopted together with new amendments that are not consistent with our course towards European integration, increase pressure on business and carry many corruption risks. Therefore, the EBA appeals to the Chairman of the Verkhovna Rada and MPs of Ukraine with a request not to support the draft law in this version and send it for revision, considering the comments of business and the relevant Ministry.

The European Business Association strongly opposes the inclusion of new provisions in Draft Law No.6134 “On Consumer Protection” that contradict the provisions of European directives, increase regulatory pressure on business, and contain corruption risks and others.
At the end of last year, the EBA addressed official letters to the Chairman of the Verkhovna Rada of Ukraine, the Chairmen of the relevant parliamentary committees, MPs, and central executive authorities with a call not to support the draft law in the wording proposed at the meeting of the Verkhovna Rada Committee on Economic Development on December 9, 2022. Thus, the draft law included proposals that had not been previously discussed (although the document had been developed for almost 4 years in working groups), it also carries serious risks for Ukrainian entrepreneurs, levelling the state course of deregulation of entrepreneurial activity and not in line with European standards.

The new rules propose to extend the draft law to the relations between legal entities, which contradicts Directive 2011/83/EU “On Consumer Rights” and destroys the very purpose of this Law, namely to regulate relations between consumers and business. The draft law is proposed to be extended to areas that do not belong to the sphere of consumption, for example, the provision of administrative services and notarial transactions, which also does not comply with Directive 2011/83/EU.
Among other provisions that are categorically not supported by the business is the creation of two new, rather monopolistic in their functions, authorized bodies – the Union of Consumers’ Associations and the Commission for Out-of-Court Dispute Resolution. It is assumed that they will have extended atypical powers to control the activities of businesses and bring them to justice, for example, to conduct additional business inspections; impose fines; determine the amount of compensation; conduct mandatory paid training for entrepreneurs; etc. Such expanded powers, according to the EBA experts, may result in interference in the internal economic activities of business, a biased approach to determining the amount of damage and the cost of training programs.
Business has already stressed that this document is of great concern to the community. All these novelties are opposed by the Ministry of Economy of Ukraine, which was directly involved in the development of this draft law in order to fulfill Ukraine’s obligations under the Association Agreement.
At the same time, according to the EBA member companies, there is a high risk that draft law №6134 “On Consumer Protection” will be put to a vote in the near future and will be adopted together with new amendments that are not consistent with our course towards European integration, increase pressure on business and carry many corruption risks.
Therefore, the EBA appeals to the Chairman of the Verkhovna Rada and MPs of Ukraine with a request not to support the draft law in this version and send it for revision, considering the comments of business and the relevant Ministry.